China

China

Chinese subsidy abolition dismissed by CWEA

9 June 2011
by Wu Qi

CHINA: The Chinese government’s abolition of a policy subsidizing Chinese wind turbine manufacturers using domestically produced components has been likened to a political gesture by the country’s energy industry officials.

US trade representative Ron Kirk

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The 'Interim Measures of Ministry of Finance on Management of Special Fund for Wind Power Equipment Industrialization' policy was launched by the Chinese Ministry of Finance in 2008.

Under the scheme, Chinese companies, or companies with Chinese controlling shareholders that develop and industrialize production of 1.5MW and larger-capacity wind turbines and components, will receive subsidy of CNY600/kw for the first 50 turbines.

Kirk said: "This outcome helps ensure fairness for American clean technology companies and workers." However, his view was not shared by figures in the Chinese wind industry.

Shi Pengfei, vice-president of China Wind Energy Association (CWEA), said the policy was not so influential as US imagined. It granted only one-off subsidy to eligible enterprises for the production of the first 50 turbines. The subsidy was meant to encourage technological innovation than lowering production costs of homemade turbines.

While the end of the policy was announced on June 7 by US Trade Representative Ron Kirk in Washington. The Chinese government has not commented officially.

This result came seven months after the United States launched an investigation following a complaint from the United Steelworkers.

Kirk's office estimated that the grants provided to Chinese companies since 2008 could have totaled several hundred million dollars. The size of the individual grants ranged between $6.7 million and $22.5 million.